California's Ongoing Issues with Sports Betting Laws

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00:00the state of california and the tribes getting together to implement sports betting for the

00:04future not only have we not had that happen it feels like we're going backwards in california

00:09no sweepstakes maybe no daily fantasy underdog who does so much business in the state is looking

00:14to basically change the way that they operate in order to stay in business there

00:18man disappointing results here for that state

00:21yeah there's a lot going on in california right now with respect to sports betting with respect

00:29to sweepstakes games with respects to prediction markets and most recently daily fantasy sports

00:35which famously is in the news now because um the attorney general just declared that daily fantasy

00:42sports uh are not legal in the state i want to be clear that he didn't say anything about regular

00:47fantasy sports uh with you you know your fantasy football team or something like that it's daily

00:52fantasy sports specifically the games offered by companies like underdog and prize picks which

00:58have really made a killing in california which doesn't have legal sports betting so people only

01:03if you want to kind of bet the only real option you have is to play these pick'em style games which

01:09are pretty much just player prop parlays you know you stake money and you get a bigger outcome if you're

01:15right and you lose the money if you're wrong it's something that a lot of states have identified as

01:19hey this is sports betting and in response underdog in about in 20 states now has converted

01:24how those games work from being player versus the house where i put in ten dollars and if my parlay

01:31hits or my pick'em combination hits i get a hundred back uh from underdog they've now changed that

01:37mechanism to be peer-to-peer so think of the ten dollars i was betting as now an entry fee and all

01:44the entry fees that players put on a particular game or a particular night get pooled into the prize

01:51outcome so then if i win my money comes from that pool it's effectively the same exact game except

01:57the prizes are no longer fixed they depend on how much money everyone's putting together so if you

02:03are a fan of these games you'll be happy that it's basically staying the same uh just under a different

02:08name it's not called underdog champions um but is this going to stay for long is kind of the big

02:13question underdog had filed a lawsuit to stop this opinion from coming out they ended up losing that

02:20and the opinion came out but in doing so they actually got the judge to say something that was

02:24really important for underdog and a big win for these companies uh the judge said that the opinion

02:29is uh legally non-binding and the ag doesn't really have any enforcement to change the law or put this

02:37kind of in place so in underdog's mind and in prize picks his mind which has also changed um they're

02:42kind of saying okay i guess the opinion doesn't really matter now the opinion could influence policy

02:47decisions the office could try to act but then there'd probably be a lawsuit to challenge that

02:52um the opinion was on uh the attorney general's desk for several years so he only just now issued

02:59it so the timing is really interesting as well you got to wonder why this is happening now um we'll

03:05have to keep seeing what you know we're going to keep monitoring the situation and see what's going

03:08to go on here but california is not a state like wyoming where you if you're a fantasy sports operator

03:13you just want to you know pack up shop and okay that's fine we don't want to piss anybody off it's

03:17estimated to be a three billion dollar market and there's no legal sports betting options right now

03:22so underdog is going to try to stay there for as long as they can whether it's through this you know

03:26new format or whether it's through a lawsuit down the line but it will be really interesting to see

03:30kind of what happens next as you mentioned craig we've been talking about california a lot so

03:34definitely won't be the last time